I have given up buying a house

[krisbarry]

Sydney will again peak in 2018, property cycles go in 7 to 14 year cycles, with a major boom every 30ish years.

Property prices peaked in Sydny back in 2004.

I reckon we are 2 years into a 7 year period of a flat/downward trend.

The downward trend will accelerate now with more rate rises on their way. Yipppee

 

[Knobby22]

so in effect when you live rent free in other people properties you are doing what the RBA is doing redistributing wealth,from them to you,one difference though they worked for the wealth that you are now distributing to yourself.

So what!
If you buy BHP shares on the top of the market, and sell them because you can't make your margin loan. Does that make the person who bought them bad because he thought they were originally overpriced?

I have NO pity for investors who are overgeared and bought at the top of the market. Tech/a said it himself. If you have not reduced your holdings and protected yourself then you are foolish...and a fool and his money are soon parted.

We are in a classic bubble situation. Property has risen too much making some people a lot of money for essentially doing nothing for the good of the country except keep the property off the hands of young couples. One statistic that came out today showed that young couples are delaying having kids because they can't buy.

The bubble correction will allow new people into the market. I believe it is good. When you bought you knew interest rates might rise eventually.

 

[krisbarry]

well said Knobby22

 

[visual]

So what!
If you buy BHP shares on the top of the market, and sell them because you can't make your margin loan. Does that make the person who bought them bad because he thought they were originally overpriced?

I have NO pity for investors who are overgeared and bought at the top of the market. Tech/a said it himself. If you have not reduced your holdings and protected yourself then you are foolish...and a fool and his money are soon parted.

We are in a classic bubble situation. Property has risen too much making some people a lot of money for essentially doing nothing for the good of the country except keep the property off the hands of young couples. One statistic that came out today showed that young couples are delaying having kids because they can't buy.

The bubble correction will allow new people into the market. I believe it is good. When you bought you knew interest rates might rise eventually.

Knobby,I doubt that anyone in their right mind would compare shares with a freeloader,according to him that is exactly what he is.He provides a cuddle and a warm meal she provides the roof,hardly equitable.

And as for young couples who cant buy a house,I`m not really that old but even in my lifetime we have had several booms and busts why is this generation so precious that we all need to give up our houses so thay can have it.If they cant afford the suburb they really want to live in ,then look somewhere cheaper,if they cant afford a house then perhaps they should live within their means instead of funding their lifestyle on credit,thats how their parents did it.Too often I hear, but I dont want to be like my parents who can afford to travel now that they are old I want to do it now,well if thats the case,stop whining.

 

[Knobby22]

I've got a house also and a loan.
You are right it was never easy.
Smurf said it best earlier about the present situation.

 

[visual]

I've got a house also and a loan.
You are right it was never easy.
Smurf said it best earlier about the present situation.

there you have it :

 

[Rafa]

i see a common theme here.... in most of the threads on this forum...


whining and whinging....


are we australians or what!


just get on with it FFS....

 

[visual]

Whilst I don't want to see ANYONE lose their house, I would gladly welcome an abrupt end to the incredible arrogance that seems to have developed around real estate over the past few years. I suspect a proper slump is the only cure for this unfortunately.

Some examples of what I mean:

1. "It's your fault you're priced out of the market, you should have bought when I did". In truth, the majority of those who bought before the boom have profited due to pure luck. If they were really that good at market timing then they wouldn't be living in ordinary suburban houses to start with.

If they had made some medical breakthrough, saved people from a burning building, made consistent profits over time through genuine ability to time markets, won gold at the Olympics or whatever then maybe they have reason to boast. But not when they simply got lucky buying a house.

2. Expecting the entire community to change so as to boost your real estate value. This seems to be becoming all too common, at least in Tas.

You build a house on very steep blocks in a valley. On the other side is the major highway which carries virtually all traffic heading south of Hobart. The highway opened in the late 1960's. Since there is no other means of transport in that area, all freight moves by road to and from one of the fastest growing (in % terms) regions in the country. Being a steep section of road, trucks crawl down using their (very noisy) engine brakes. All things that are common knowledge in Hobart and readily observable to anyone who has travelled on the Southern Outlet. So what do you do? Well, you build a house in this obviously noisy location and then you complain to the Transport Department wanting the trucks taken off the road or banned from using their brakes(!).

Or how about this one. You build a block of appartments literally opposite the entrance to the largest nightclub in Hobart which has operated as a club since 1995 and a live music venue 30 years prior to that. And then you complain about noise to the point of having the issue dominate local media for weeks until the owner finally gave in and closed the sole large club in Hobart (which once won a national award). Never mind all those jobs being lost. Never mind that you just scrapped literally 40% of an entire industry. Never mind the thousands who went there every week. I demand my right to build an unsoundproofed building in a commercial area directly opposite an obvious source of noise and then expect total silence. Incredible.

And again. You buy cheap land across the river from a heavy industrial area with a ferro alloy plant (4 furnaces), power station, major port, petrol storage tanks, 2 woodchip mills, a fibreboard plant, an aluminium smelter and an aluminium powder plant. The aluminium smelter has operated since 1955, the ferro alloy plant since 1962 and the power station since 1971. Hardly new. And just up the road on your side of the river is the Beaconsfield gold mine and a quarry used by the ferro alloy plant. By far the most industrialised part of the entire state. So what happens when someone proposes building another factory? You go running to the media, complaining about how this will reduce your real estate value and form a lobby group to protect your interests. Never mind that well over 1000 people would be employed in the factory, I'm worried that the value of my house, which has more than doubled in a short space of time, might fall a bit! Absolutely ridiculous.

If it takes a recession, house price crash or whatever to end this obsession with houses then bring it on. I have nothing against those who made a profit from the boom. Nothing whatsoever. But to expect an entire community to bend over backwards to maximise that profit is going way too far.

If you buy property near a highway, nightclub, smelter or whatever (or land zoned for such activities) then that's YOUR choice and you live with the consequences. Anyone who doesn't foresee that traffic might increase, hotel opening hours might change or factories might be built in an area zoned "major impact heavy industrial" has only themselves to blame if they don't like what happens. We don't bail out failed investments in shares, business etc and it's time for property investors to stop expecing the community to bail them out when they make poor investment decisions.

Smurf,you`ve heard the saying,a sucker born every minute.
Well,I think your posts explains it well.
It doesnt explain the booming housing market though. Or people who refuse to live within their means. Or did I miss something here?

 

[krisbarry]

The youngs are whinging as they cannot afford, or even get into the housing market.

The olds are whinging because their young ones are stepping on their toes, and not moving out of their homes.

The young are whinging and are telling the olds to sell up a few of their investment properties.

The olds are holding on for dear life...screaming bricks and mortar to the youngs, but the youngs have their ipods cranked up and cannot hear a word the olds are saying.

The olds are fearing interest rate rises, and hate hearing the youngs, when they rejoice about higher interest rates.

We are all whinging...

 

[krisbarry]

How many Australians are whinging and bitchin' about higher petrol prices....plenty.

Why?

A few fat cats at the top, controlling and dictating how much the rest of the market pays, and the avaliability etc etc

No different to the housing market!

The big property investors, along with many mum and dad investors will always use an excuse to protect their wealth, just like the oil companies do.

Strange how the price of petrol goes up on long-weekends, isn't it!

Just as strange how after the housing boom all the investors come out and say wait ya turn, next in line, don't wish higher interest rates on us etc etc.

 

[lewstherin]

Housing in Australia is pretty ridiculously priced at the moment, particularly in WA. I've lived in the US and am originally from South Africa, and I have never seen such a pre-occupation with real estate like the locals have here.
Seems like every Aussie over about 35 that I meet loves to move the conversation to their investment properties.
In Perth, a lot of ordinary people have doubled their money through simply being in the right place at the right time (ie. 3-4 years ago). While I don't begrudge them, I definitely find the state/federal government's position laughable.

Essentially you have the federal government saying "Young people have lots of kids, go buy a home!", whilst the state governments tax the hell out of first time home buyers and maintains a strangle-hold on the supply of land.

In WA, first time buyers need to pay less than 250k in order to avoid stamp duties, despite the fact that you can't buy a small plot of land for less than 200k at the moment (established median prices are over 350k).
Unfortunately, it seems that the WA state government is incredibly biased towards its real estate lobby, since land releases have slowed to a trickle and the whole release process is through greedy development groups - many of whom are withholding land to extract higher prices.

The federal government must be smoking something pretty strong to think that 7k is going to make much of a difference, when a 400k house (ie. a decent 3 bed 23kms north of Perth) will set the first time buyer back 20k in duties and $2400 a month in repayments.

As an eligible first home buyer, earning over 85k a year, I just can't stomach the Perth market at the moment. Its one thing for investors to expect a good return from real estate, but what is happening in Perth is out of control.
25% growth per year for the past 2-3 years just seems wrong somehow - I figure the only way this has been sustained is due to foreigner's weighing in with Pounds...

My money will stay in various other investments - much of it cash based (bring on the rate rises ) - and maybe in a few years I'll move onto cheaper pastures...and actually pay a reasonable amount for my first home.

 

[krisbarry]

This 25% a year growth on real estate started in the east (NSW) and has finally reached the west (WA).

This complete obsession with real estate will eventaully die a painful death, and the sooner it does the better.

Its like a stock that booms in share price (AMU/CDU, ring a few bells) everyone is talking about it and everyone wants a piece of it.

When the stock dumps, nobody will want to own it and no-body will be talking about it.

AUSTRALIA, YOUR OBSESSION WITH HOUSING IS....G A M E O V E R!

 

[krisbarry]

As an eligible first home buyer, earning over 85k a year, I just can't stomach the Perth market at the moment. Its one thing for investors to expect a good return from real estate, but what is happening in Perth is out of control.

May I point out that your wage is nearly twice the average male wage....yep even the wealthy are finding the market hard to stomach.

More signs of an over hyped, over inflated market ready to crash

 

[lewstherin]

This 25% a year growth on real estate started in the east (NSW) and has finally reached the west (WA).

This complete obsession with real estate will eventaully die a painful death, and the sooner it does the better.

Its like a stock that booms in share price (AMU/CDU, ring a few bells) everyone is talking about it and everyone wants a piece of it.

When the stock dumps, nobody will want to own it and no-body will be talking about it.

AUSTRALIA, YOUR OBSESSION WITH HOUSING IS....G A M E O V E R!

As much as a crash would suit me - could buy a house of my own - I don't think real estate will ever significantly crash.

This is primarily because:
a) state governments/local governments seem far more interested in supporting high land prices through restrictions on release, sprawl boundaries, a policy of increasing housing densities (ie. backing apartments over standalone houses), and high land taxations & duties.

b) I believe that foreign purchasers will continue to flood in, artificially inflating prices due to their ability to pay more (in many cases due to a superior currency). To me the kind of gains made in house prices could not have been driven purely by the locals, since average young families simply cannot afford decent sized standalone residences. The average locals that have bought in this market now have unprecendented mortgages both in terms of income-relative size and durations.

A protracted slump in real estate can only occur if cheap money disappears and the migration flow slows.

 

[adobee]

I would be interested to know the amount of people on this share trading site who actually also own investment property ???? I would assume close to 75%

I do not really understand what is the problem.. Any day of the week you can find the deal of the century, with some knowledge or prior research. Prior to shares (of which I am a total beginer) I have had large dealings in property.

Why give up it is not a hard process -

1. Find the right property
2. Negotiate the right price
3. Finance the property
4. Furnish the property
5. Rent the property
6. Let your 8%+ rental return cover your costs
7. Let your depreciation cover your tax

Grab the BRW richlist and see who is rich and not a property owner.

A few tips -

1. Dont buy a brand new unit and dont buy from a developer, you are going to get ripped coming and going.
2. Buy in an area that their is a reason for demand ie next to the university
3. Dont buy in the western suburbs buy on the city & fringe
4. Dont get jacked by a financial planer who is making commission on you coming and going. You are better of taking advise from the real estate agent.
5. Find people who need to sell are over extended etc and negotiate hard.

 

[wayneL]

6. Let your 8%+ rental return cover your costs

3. Dont buy in the western suburbs buy on the city & fringe

I'd like to see that

 

[lewstherin]

Why give up it is not a hard process

I haven't given up, just don't want to jump into the mosh pit with the other lunatics buying property in Perth at the moment.

1. Find the right property
2. Negotiate the right price

Virtually impossible in Perth at the moment. Houses here are commonly selling for 20k+ more than the asking price within a day of being listed. I kid you not - I've been out there, I spoken to the agents, I seen it for myself. Plots of land are having to be sold by ballot system because 10x the number of buyers rock up at pretty much every land release.

Being a real estate agent in Perth is the easiest & most lucrative job around at the moment - provided you can actually get hold of some properties to sell

 

[Realist]

Why give up it is not a hard process -

1. Find the right property
2. Negotiate the right price
3. Finance the property
4. Furnish the property
5. Rent the property
6. Let your 8%+ rental return cover your costs
7. Let your depreciation cover your tax

Grab the BRW richlist and see who is rich and not a property owner.
.

Haha, my landlord gets a 2.8% rental return and pays about 0.6% in water and body corporate fees.


I suggest you grab the BRW richlist and find someone who is rich that does not own a nice watch - does owning a watch make them rich? Doubt it, neither does owning a property.

The simple fact is anyone who bought in Sydney 3 years ago has lost alot of money. Anyone buying in Perth especially and probably the rest of the country has seen what has happened in Sydney and is fair warned.

I am not saying do not buy a house, I am saying take note of what has happenend in Sydney and be particularily carefull.

 

[wayneL]

I haven't given up, just don't want to jump into the mosh pit with the other lunatics buying property in Perth at the moment.

Virtually impossible in Perth at the moment. Houses here are commonly selling for 20k+ more than the asking price within a day of being listed. I kid you not - I've been out there, I spoken to the agents, I seen it for myself. Plots of land are having to be sold by ballot system because 10x the number of buyers rock up at pretty much every land release.

Being a real estate agent in Perth is the easiest & most lucrative job around at the moment - provided you can actually get hold of some properties to sell

The thing is, about the only attraction of Perth is the low cost, easygoing lifestyle. It is missing so much of what makes a world class city.

Now that it is becoming an expensive, stressed place to live, it has no attraction.

When crude is > $100 bbl, it won't be a very good place to live at all.

 

[It's Snake Pliskin]

The thing is, about the only attraction of Perth is the low cost, easygoing lifestyle. It is missing so much of what makes a world class city.

Now that it is becoming an expensive, stressed place to live, it has no attraction.

When crude is > $100 bbl, it won't be a very good place to live at all.

Wayne, I agree with your assessment of Perth.